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New York Should Have a Congestion Charge

Tolling high-traffic roadways is a smart way to mitigate traffic and raise infrastructure funding.

New York City could become the first American city to implement a congestion charge, if the proposal can survive over a dozen public meetings followed by a federal environmental review.

Congestion charges are not new. Or at least the concept isn’t. The idea is simple: Because the supply of road space allowing for freely moving traffic is finite, when we don’t charge for use of it and so don’t control demand, shortages happen, e.g., any situation resulting in traffic jams, gridlock, and idling vehicles. Congestion charges have been proposed for Manhattan for years, notably by William F. Buckley Jr. when he ran for mayor in 1965, but the concept really took off after London implemented one in the early 2000s under Labour mayor Ken Livingstone.

London’s congestion charge had two purposes: to reduce traffic in the central area, including the City and Westminster, and to improve air quality. Income from the charge over what it costs to administer goes to Transport for London, the public transportation agency, and it has played a major role in a number of investments and improvements in public transit across London, such as Crossrail.

The plan currently under discussion in New York calls for a charge on cars going south of 59th Street in Manhattan. This includes many of the city’s landmarks: the Empire State Building, the Chrysler Building, Rockefeller Center, St. Patrick’s Cathedral, the High Line, Grand Central Station, the Waldorf-Astoria, the United Nations, Union Square and others. It would also include most of the bridges and tunnels, as well as the city’s two main business districts: Midtown and Wall Street.

New York State authorized a congestion charge in 2019 as part of its budget bill for 2020. It exempts vehicles on FDR Drive and emergency vehicles. Residents of Manhattan within the zone making less than $60,000 a year can also claim a tax credit equal to the amount they paid in congestion tolls. The goal was to raise enough money to issue $15 billion worth of bonds for Metropolitan Transit Authority capital projects.

One of the benefits of New York’s plan is that it allows for tolls to be variable through the day. The charge could be higher when travel demand is at its peak and lower when there’s less demand. This encourages people to schedule trips when it’s less busy.

But even if the charge were a flat rate levied on every car traveling into the zone during a certain time, it would still function. By encouraging even a few people to replace car journeys with transit or bike trips, major gains could be made. According to Transportation for Massachusetts, reducing the number of cars on the road by five percent can reduce congestion by 20 percent. Reducing congestion will reduce the amount of time cars spend idling in traffic, improving air quality and speeding up deliveries.

If revenue from the congestion charge is to go to fund investments in New York’s transit, it is important that overdue reforms be made to the Metropolitan Transit Authority. New York’s construction costs are the highest in the developed world despite comparable labor and land costs to other major cities, low borrowing costs, favorable geology, and use of cheaper cut-and-cover construction techniques. The reasons include a lack of competition, complex contracting processes, and an overdependence on consultants.

If the congestion charge proves successful in New York, it could spread to other cities, such as Boston, San Francisco, Los Angeles, and other urban centers known for their constant and unforgiving traffic. In fact, other cities should be encouraged to adopt congestion charges, for several reasons.

First and foremost, although there is substantial federal aid to pay for construction of new highways, roads, bridges, rail lines, and so on, maintaining them is mostly left to state and local governments. Cities and counties can only tax from within their borders, meaning state funds are needed to make up any difference. What’s more, the most heavily used road segments are usually found in the downtown area, meaning they are the city’s responsibility. The upshot is that, if you live in, say, Auburn, New York, and never drive to New York City, New York State is still taxing you to pay for the roads and tunnels there, while if you live in Scarsdale and drive in to New York City five days a week, you’re paying the same statewide rate. It’s far more fair to the people Upstate if the people in Scarsdale or similar wealthy suburbs pay a market rate for their driving. All things being equal, this should lower the taxes paid by people Upstate, or at least allow Albany to spend less of their money on New York City. This also goes for residents of New Jersey, who don’t pay any taxes at all to fund the New York infrastructure they use, unless it’s run by the Port Authority.

Secondly, a congestion charge can be a huge boon to businesses. By levying the charge on passenger vehicles, but not on commercial vehicles, the congestion charge plan encourages the drivers of those cars to carpool or take the Subway. In addition to reducing congestion, this will free up parking spaces, which should allow the commercial vehicles to make their deliveries more easily, which should reduce the transaction cost and make them cheaper. This would help the economy of the New York area and shouldn’t be too unpopular with New Yorkers.

The congestion charge can still be derailed by the lengthy federal regulatory process it must go through and the attempts by suburban drivers to carve out far more exemptions than are warranted, saying they have equity concerns in order to guilt trip the people in charge of setting it up. These efforts should not be allowed to succeed: The benefits both to residents of New York City and the state outweigh the slightly higher cost a Long Island hedge fund manager will have to pay to have dinner at Le Bernardin.

Matthew Robare lives in Boston. This New Urbanism series is supported by the Richard H. Driehaus Foundation. Follow New Urbs on Twitter for a feed dedicated to TAC’s coverage of cities, urbanism, and place.



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